Myths about Obamacare and Workers’ Comp The Obama administration has said that the Patient Protection and Affordable Care Act, enacted into law in 2010 and scheduled to take effect on Jan. 1, will reduce workers comp claims because so many additional people will be covered under personal insurance policies. But there is reason to think otherwise.The first issue is that so many companies are reducing the insurance they offer employees or are cutting employees hours so much that they fall below the laws threshold, so employees dont have to be covered at all. Employees who arent covered under corporate policies or who are underinsured are more likely to make workers comp claims.Here are just a few examples from National Review Online: SeaWorld used to let part-time employees work as many as 32 hours per week, but the company is dropping the limit to 28 hours to keep them under the 30-hour threshold at which it would be required to provide health insurance under Obamacare. More than 80% of the companys thousands of employees are part time or seasonal. Carnegie Museum in Pennsylvania scaled back the hours of 48 of its 600 part-time employees to less than 30 hours a week to sidestep the mandate to provide health-care coverage. Virginia Gov. Bob McDonnell decided to limit the states part-time employees to 29 hours per week. Brevard County, Fla., told a local television station that the countys 300-plus part-time employees will be capped at something less than 30 hours to save the county about $10,000 per employee in health insurance. Fatburger announced that franchises had begun making efforts to keep employees under the 30-hour threshold, including some franchises engaging in job sharing. As more companies shift to shorter work weeks, you can expect claims under workers comp to keep climbing.Proponents of Obamacare still say it will decrease workers compensation costs in several ways, including through the elimination of lifetime caps on medical insurance coverage. The argument is that these caps on employees private policies pushed them to file workers compensation claims. Really? Many of the leading cost drivers for work-related injuries are Musculoskeletal Disorders (MSD), better known as soft tissue injuries. According to the Bureau of Labor Statistics (BLS), soft tissue injuries (sprains and strains) accounted for 40% of all work-related injuries that resulted in lost days of work. I do not believe that these types of injuries would affect the lifetime maximum for health insurance, which is typically $1 million.Proponents also note that a health care insurer can no longer refuse to provide coverage because of preexisting conditions, conditions they claim were often not covered by private health care and thus encouraged employees to seek coverage under workers compensation. While this is a good point, the National Reviews examples show that many people are losing health care coverage or will see it reduced, meaning that there will be a greater likelihood of workers compensation claims. Yes, there are penalties for not securing health care coverage, but they are modest, especially in the early years of Obamacare, and there is no real mechanism for enforcement. The IRS has the responsibility for collecting penalties but has no true powers to do so.How are people supposed to afford care if their hours have been cut? You guessed it: workers compensation.

Today is the first day that California’s seven million uninsured can begin shopping for individual health insurance at CoveredCA.com.

Individuals and families who have individual market health insurance already (not through their employer, union or government health insurance like Medi-Cal and Medicare) and small businesses can also shop there too.

This is a historic day, yet another of a long series of important ObamaCare health insurance reforms that we have been working to implement with our partners in state and federal government since I was sworn in as Insurance Commissioner in 2011. Congratulations to Covered CA for meeting this important deadline.

Open enrollment for health insurance sold through Covered California runs from today, October 1, 2013 until March 1, 2014. Actual health insurance coverage does not start until January 1, 2014. To be covered as of January 1, 2013 you have to purchase by December 15, 2013.

You can shop and purchase directly at www.CoveredCA.com, or by calling Covered CA at 1-800-300-1506, or with the assistance of a Certified Enrollment Counselor certified by Covered CA, or through an agent or broker licensed by the Department of Insurance and certified by Covered CA.

Take a moment to forward this email to friends, family, neighbors and colleagues to help get the word out to those who are uninsured that they can and should begin shopping at CoveredCA.com. There are subsidies available for those below certain income levels so its well worth the time spent to see how purchasing health insurance through Covered CA might help you and your family.

Thoughts and impressions regarding the workers’
compensation industry throughout the United States including all state systems.

Thursday, September 19, 2013

Too Much Procedure to Talk

“Bottom line, we have gotten away from talking to each
other and communicating.”

That’s what former California Workers’ Compensation Judge and current mediator Frank Russo told me
the other day.

Russo emailed me in response to one of my blog posts critical of the lack of
claim management cooperation inherent in today’s workers’ compensation dispute
resolution systems (YOU
Created The QME Problem).

I was attracted to workers’ compensation law as a young
lawyer because case duration in general matched my short attention span and it
was a collegial profession - everyone knew each other which facilitated communication
and prompt case resolution.

So much of this has changed over the years. Litigated cases now drag out as
long, or longer, than most civil cases. Trial by procedure
rather than by substance seems to be how law is now practiced. And
collegiality has taken a back seat to litigation tactics.

In other words, people don’t seem to talk anymore. Folks may talk relative to
their special interest, but in the global “we can solve this”
communication standard there isn’t a whole lot conversation going on.

Litigation minded attorneys don’t seem to be comfortable with the process of
trying to reach an agreement “Quaker style.” Adjusters have
huge case loads and get “too busy” to look up from

their desk and when they do it
is typically under some duress or pressure because of compounding problems.

Some are protective of their billings, some are protective of their litigation
tactics.

Some companies just don’t care because of their compensation schemes, some are
penny wise and pound foolish. Some have bean counters focused on short term
financial reports.

Some are just too close to the situation to see the bigger picture.

One of the remedies I proposed to the California QME “crisis” was to
just settle cases - so some are overpaid, some are underpaid; in the grand
scheme of things this all washes out.

But currently we as a system are very good at making victims out of work
injuries and fostering that condition.

We take control away from the injured worker and from the employer and in the
name of liberty, justice and freedom for all, tell these people what they will
do, when they will do it, and for how much.

It’s not about delivering what the law says is due, and it’s not about
protecting an employer’s financial interests.

I dare say we are more about absconding with the very little dignity an injured
worker has when entering the system and delivering the rotten fruits of our
failed attempts to the employer at the end.

Yeah, I know, not all claims are like this - in fact most aren’t. Those are the
undisputed medical only claims that comprise the bulk of claims and cost the
least amount of money.

But the ones that end up in litigation for one reason or another create the
greatest expense and drag down systems the most.

So why don’t more and more litigated cases go to mediation? What happened to
TALKING to each other with the assistance of a trained professional who
understands the law, understands the issues, and has no interest in the matter
other than delivering a case closed status?

Russo, of course, can’t understand why more claims aren’t mediated and points
to Florida to demonstrate the successes of mediation.

Florida
just released its latest report
on mediation in its workers’ compensation system and the numbers are
impressive, particularly if the ratios were translated to California’s dispute
resolution totals.

Out of 58,041 Petitions For Benefits (the functional equivalent of an
Application in California), 15,850 went to mediation. Of that, only 25.1%
resulted in an impasse, meaning that nearly 75% obtained some settlement
status.

Another 11,738 mediations were scheduled during the year,
but were “resolved prior.” This means that some claimed benefit was
provided or authorized in 11,738 instances. Some of these would have resolved
anyway, but some resolved because the scheduled mediation provides a
deadline and we are all focused on deadlines.

Another 10,712 mediations were scheduled, but the pending
PFB was “dismissed.” These are most likely those where the benefit
was obviously due, but there had been some oversight and so the benefit was
provided before fee/cost entitlement attached, or they were claims for benefits
which evidence was not adduced to support, and they were dismissed.

Both of these (11,738 and 10,712) are likely situations in
which mediation played a “silent” role as that deadline focused
attention on the issues and with that focus came cancellation or dismissal.

Another 5,462 scheduled mediations were reset for private mediation. These are
likely the more involved situations in which the parties think they will need
more significant time to work through differences such as multi-party claims.

In my mind pretty impressive stuff.

The key difference between California and Florida besides 3500 miles and my personal
opinion that California grows better oranges (particularly in Ventura County),
is that in Florida mediation is mandatory in most cases (Fla. Stat. 440.25(1))
within 130 days after a PFB is filed.

If a state mediator can not accommodate that time frame then the matter is
assigned to private mediation at the employer’s expense.

So what do you think California?

I’ll tell you what I think (you knew that was coming): mediation won’t work in
California; certainly not voluntary mediation and probably not mandatory
mediation.

Right now the workers’ compensation system in California favors disputes, NOT
dispute resolution. Procedural defense, and for that matter offense, takes
precedence over claim substance.

Not until California strips the workers’ compensation dispute resolution
process of all of the redundant, unnecessary, self-serving, billable, arcane,
illogical, inane, confusing and ridiculous procedural steps necessary to get to
a settlement will mediation ever work.

If you doubt any of my characterization of the current process, then please,
study my California
Workers’ Compensation Flowchart and you’ll understand the madness. When I
started the Flowchart in 1995 it fit on a single 11 x 8.5 sheet of paper. Now
you need an entire wall.

Systems collapse on themselves when procedure
trumps substance, and if this is the future of workers’ compensation it is
not sustainable.

Sacramento, CA (WorkersCompensation.com) - The minimum and maximum temporary total disability (TTD) rates for 2014 will increase on Jan. 1, 2014. The minimum TTD rate will increase from $160 to $161.19 and the maximum TTD rate will increase from $1,066.72 to $1,074.64 per week.

Labor Code section 4453(a)(10) requires the rate for TTD be increased by an amount equal to the percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury. In the 12 months ending March 31, 2013 the SAWW increased from $1,059.38 to $1,067.25.Under Labor Code section 4659(c), workers with dates of injury on or after Jan. 1, 2003 who are receiving life pensions (LP) or permanent total disability (PTD) benefits are also entitled to have their weekly LP or PTD rate adjusted based on the SAWW.The first quarter 2012 SAWW figures may be verified at the U.S. Department of Labor site. The figures for 2013 may be verified here.

SACRAMENTO, Calif. –Reggie Williams‘ movements are as labored as his breathing. While others walk the halls of the state Capitol with apparent ease, the 58-year-old formerCincinnati Bengalslinebacker struggles to get around. He has a crutch under each arm, and his strides are uneven because his right leg is three inches shorter than his left due to surgical complications from injuries sustained during his 14-year career.

A raised scar runs down the middle of his right knee, which has been operated on 24 times. It’s so swollen it’s hard to tell where the top of the knee begins and the bottom of his thigh ends, so disfigured that there appears to be three large broccoli heads beneath the skin. Williams, the NFL’s Man of the Year in 1986 andSports Illustrated’s co-Sportsman of the Year in 1987, normally keeps the knee covered, but on this sunny April afternoon he repeatedly raises his pant leg and exposes it to cringing legislators. His hope is that the reality of his situation will persuade them to vote no on AB 1309, a bill that would prevent major- and minor-league athletes in all sports from filing workers compensation claims in California if they played or ended their careers with clubs outside the state.

The fight over workers comp reform for pro athletes isn’t new. It has taken place in Florida, Arizona and Louisiana, to name a few states. The battle in California is significant, however, because it’s often regarded as the state of last resort, meaning out-of-state players who weren’t informed of their workers comp rights by their teams — or who had physical or cognitive issues surface after the statute of limitation lapsed in their home states — could have their cases heard in California, one of only nine states that recognizes what’s known as “cumulative trauma,” wear-and-tear injuries or conditions sustained from their jobs.

Proponents contend that AB 1309 would close the “loophole” that allows active and retired athletes to “double-dip” by filing claims in both their home state and California, sometimes without ever having actually played in California. Opponents counter that the bill would retroactively wipe out hundreds, if not thousands, of pending cases and deny medical care to athletes who paid into the system during their careers.

The issue is particularly acute among California team owners, whose workers comp costs sometimes are two-thirds higher than their out-of-state colleagues. Local NFL owners contend the discrepancy puts them at a competitive disadvantage because they’re left with less revenue for expenses like coach and player salaries, facility upgrades and team travel.

Some background: Each year the NFL and the union meet to estimate the costs for workers comp. That figure is then averaged among the 32 teams, with each receiving an equal credit (also known as a benefit) against the salary cap. For simple math, say the estimated cost is $32 million; each team would receive a $1 million credit.

The problem is that clubs in Ohio or Texas might spend only $500,000 on workers comp while franchises in California might spend as much as $4 million. That’s a net loss of $3.5 million for the California owners, who argue that if player costs are going increase across the board in things like salaries, retirement benefits and medical care, the expenses should be shared evenly by clubs — particularly when it comes to workers comp, which is among the largest expenses.

“It’s a fairly big competitive issue when year after year the California teams are spending so much more on workers comp,” said a high-ranking official for a California team. “If a player spends most of his career on a team outside the state, we shouldn’t be paying his workers comp claims.”

Reggie Williams shows off the damage done to his knee from his days in the NFL.

Jim Trotter/SI

The official admitted that workers comp is one of the talking points when his team is weighing whether to sign an out-of-state free agent who might be at the end of his career but could still contribute for a year or two.

“We’re less likely to bring in a guy like that (under the current system), and that’s what we’re trying to take off the table,” said the official. “We don’t want California teams tonotbe a destination for some players because of workers comp. It doesn’t mean we wouldn’t sign him, but it certainly enters into the equation.”

The simple solution is to pool the workers comp credits and pay claims as they’re awarded (a claim does not guarantee an award, by the way). But out-of-state owners have been unwilling to accept such a proposal because it would mean less money for them. And with potentially two more franchises settling in Los Angeles through expansion or relocation, it’s understandable that California has become the latest battleground in this fight.

Still, critics contend AB 1309 is too drastic. They say it not only would retroactively erase legitimate cases in which teams failed to notify players of their rights before the statute of limitations lapsed — like with Williams — but also prohibit athletes who spent a significant majority of their career with California clubs from filing claims if they ended their careers with out-of-state clubs.

The aggressiveness of the bill stems from accusations that the system is being abused and bogged down. In a March op-ed piece in theOrange County Register, bill co-sponsor Curt Hagman (R-Chino Hills) wrote that “when the state of California pays six figures to an injured out-of-state millionaire, fewer resources are available for the average worker, who often desperately needs assistance to make ends meet.”

The reality is that workers comp awards are paid by employers, not individual taxpayers.

Hagman also said during a public hearing that players get lifetime medical care. That is not correct. Only vested NFL players get post-career coverage, and it terminates after five years.

Assemblyman Henry T. Perea (D-Fresno), who introduced the bill and chairs the Assembly’s insurance committee, also has said the system is “broken” and “abused” and claims by out-of-state athletes have cost taxpayers “hundreds of millions of dollars.” The union points out, however, that individual taxpayers don’t pay awards; that a presiding judge in a recent case stated that athletes accounted for only 5 percent of his caseload; and that athletes paid $171 million in California taxes last year (visiting athletes are taxed when they compete in the state).

Perea declined interview requests for this story over a two-week period.

How serious are owners about reforming workers comp? In Louisiana, Saints owner Tom Benson supported an unsuccessful bill that would’ve deducted workers comp awards from a player’s salary on a dollar-for-dollar basis. In Tennessee, owner Bud Adams’ Titans have filed cease and desist orders against at least two dozen retired players — including notable starsEddie GeorgeandFrank Wycheck– because their contracts precluded them from filing in multiple states for the same injuries or conditions.

Retired fullbackLorenzo Nealis among those who has filed in California. The four-time Pro Bowler played for seven teams over 16 years, including five with theSan Diego Chargers. Yet despite being a lifetime California resident — he still resides in his hometown of Fresno — he’d be ineligible for workers comp under the bill because he ended his career with an out-of-state club. He says people shouldn’t be surprised that players don’t file claims while they’re still capable of being employed by a team.

“Let’s be real,” he says. “You don’t want to file a claim while you’re still playing because teams will use it against you and you won’t have a job. Just like with concussions, guys still try to get back on the field because they want to stay employed and you only have so many years that you can play the game. So, yes, you see guys go out on the field and play because they love the game, but you also understand what happens if you don’t play.”

A league spokesman says there are remedies for retired players beyond workers comp. For instance, Aaron Jones, who played nine seasons for three teams, is receiving $9,000 per month for life from the NFL’s disability program. AndChad Brown, who spoke in Sacramento against workers comp reform, is receiving $6,000 per month in NFL disability benefits while still being covered by NFL insurance and has $300,000 in an NFL-funded Health Reimbursement Account.

But what about players like Williams? He spent 14 years with the Bengals before retiring in 1989, did not file for workers comp in Ohio because, he says, he wasn’t notified of his rights, and now can’t get affordable healthcare because of pre-existing conditions. He says he turned to California only after learning decades later he could file for cumulative trauma in the state. If he won an award it would be paid by the Bengals, and not a California club.

“I’m not here to tell you there aren’t any abuses of the system, but I am here to tell you there are many players who are worse off than me, and the severity of my knee is only going to get worse,” Williams says. “I’m going to have to live with it regardless of anyone’s decision. The question is, is a judge who will listen to a fair hearing and at least provide some assistance and (and hold accountable) my former employer, for whom I played faithfully for 14 years. You’ve got to have a forum. If California is not the forum and there are no other forums then there’s nothing left for me other than the ultimate unfolding of Obamacare.”

It’s possible that AB 1309 could be passed in a weaker form. For instance, the sides could grandfather in some current claimants so they maintain their existing benefits, or phase out their benefits gradually instead of abruptly terminating their cases. The ultimate irony remains that if the bill passes as currently written, Williams and other athletes would have to turn to government assistance in covering their medical costs. In that case, taxpayerswouldbe the ones fitting the medical bills.

One of the peculiar laws in the California workers’ compensation system (and there are many) is the Qualified Medical Examiner (QME) process.

The QME system was devised, as are so many things in comp, to eliminate a pervasive problem - but has itself become a pervasive problem, because, like we see so often, those who make the laws are not involved in actually executing the laws.

In the old days before the QME process attorneys shopped for doctors willing to write a report that was consistent with how that attorney felt the case should be managed. Applicant attorneys had their favorite doctors, and defense attorneys had their favorite doctors.

Then there would be lengthy litigation fighting about which doctor was more correct.

The QME process was supposed to eliminate doctor shopping and the lengthy litigation.

Doctor shopping was sort of eliminated, but the process quickly devolved as DWC strained to keep up with requests for QME panels. Seems the volume of medical-legal disputes was underestimated.

Former Division of Workers’ Compensation (DWC) Administrative Director (AD) Rosa Moran had an almost singular focus during her short tenure - to eliminate the back log of requests for QME panels in litigated cases.

Moran did a good job. When she took the job the time to get a QME assignment was 10 months. When she left the job she had gotten that time down to about 4 weeks.

Now, DWC is behind again.

Division spokeswoman Erika Monterroza told WorkCompCentral the Medical Unit was issuing panels within 30 days until July 2012, but is now about five months behind in processing requests.
Anecdotal observations by attorneys put the actual time more like 7 to 10 months.
In one of likely many situations, the wait to get a QME panel was so long, the parties settled the case without an independent medical because neither the worker nor the employer wanted to wait any longer for a panel to issue.
This is a case, again, where the system is in the way of itself, depriving injured workers of the Constitutionally guaranteed right to expeditious resolution of their claims and injuring employers with excessive experience modification factors on their premium renewal because claims remain open for extended periods of time.
It seems to me that this is a process that should be completely automated, with a self service feature that does not require teams of individuals to pour through thousands of applications trying to match physician requests with available QMEs.
The process is not supposed to be subjective - which is the main criteria for building any computer system. The business rules are well known. The process is not complex.
It simply is a matter of paperwork overload - the very thing that computer systems are excellent at eliminating.
The employer-financed funding for DWC this year, I believe, is about $340 million. It seems to me that a small bit of that funding could be budgeted to write the programs necessary to automate the QME process.
But can the The State be trusted to spend wisely on computer systems? DWC doesn’t have a good track record.
The Administration spent about $60 million (at last count) bringing online in 2008 its Electronic Adjudication Management System (EAMS) - a system that was to give the DWC valuable information about the case load in the District Offices and the ability to better manage these claims.
I have been critical of EAMS in the past (still am), EAMS has been the subject of unflattering investigative reporting by the Los Angeles Times, and the system continues to frustrate the user population who have otherwise grown adept at maneuvering around its foibles and idiosyncrasies.
Still, there are functions in EAMS involving much more complicated processes than constructing a panel of QMEs that work well and are much more efficient than the old manual activities that were replaced with automation.
We bank over the Internet. We shop over the Internet. We engage in complex communications involving multiple sets of people over diverse geographic zones in efficient and time saving manner - all via networked computers … but we can’t get a panel of three doctors from which 2 are eliminated so that the last one does the evaluation?
I know I’m naive about how government procurement functions, and how much effort is necessary to really do something that benefits the public - seems to me however that someone in Oakland should be able to take a team from the state’s information technologies agency and whip up some code to get this job done.
I’m kind of simple like that though - remember, I’m just a dude with a computer on the Internet writing opinion into a networked blog that anyone with a computer and Internet connection can read and comment on, share, search or save. [Note heavy sarcasm here.]
Like those who write our laws, I don’t have any actual experience in getting the job done.

Pharmaceutical companies are often accused of contributing to American’s
overusing medications because of the companies’ ubiquitous advertising. But in a
Wall Street Journal article, a 1990’s advocate of pain medication has done a
180-degree turn in his thinking, perhaps taking a bit of the blame for the
ensuing prescription drug abuse epidemic.

Dr. Russell Portenoy, a pain
management specialist at Beth Israel Medical Center in NY (in fact, he’s
department chair), initially said that painkillers like Percocet, Vicodin, and
OxyContin-all derived from the opium poppy-could help people with chronic pain,
and the drugs grew in popularity. But now he says he went too far and he didn’t
warn people enough about the risk of becoming addicted. Sounding somewhat
guilty, he says “We didn’t know then what we know now.”

The drugs are
notoriously more addictive than previously thought, and not always the best
solution for long-term pain. Unfortunately, not all doctors know that the tide
has turned among early proponents of using these drugs for pain
management!

Initially, Portenoy was a key promoter of opioids beyond
being used mostly for cancer pain, and he actually said, along with some
followers, that there were few overdoses and less than 1% of users become
addicted. He wasn’t just kidding when he said recently that if only we’d known
then what we know now.

It’s heartening to hear him come clean about his
possible part in the current drug epidemic. He didn’t have to speak the truth.
But then he mentions some good that came of his promotion, attributing his
mother’s relief from arthritis pain to her 15 years of hydrocodone use. It’s
true that these meds help many people in the short-term and that not everyone
becomes addicted, even with long-term use. Plus, pain is real and people in pain
deserve relief.

But it’s frightening when one person, or a small group of
people, wield so much power. People look up to their medical professionals and
rely on them. Thank goodness for the movement in which patients are persuaded to
take a more active role in their medical care and are more comfortable
questioning their doctors.

It’s also frightening to learn what the drug
companies did after doctors jumped on the bandwagon ofThumbnail image for
Oxycontin.gifdangerously prescribing opioids. The article says that “In 1996,
Purdue Pharma LP released OxyContin, a form of oxycodone in a patented,
time-release form, and rivals followed suit.” It seems that they paid the
price, though. “In 2007, Purdue Pharma and three executives pleaded guilty to
‘misbranding’ of the drug as less addictive and less subject to abuse than other
pain medicines and paid $635 million in fines.”

Portenoy was also
president of the American Pain Foundation in the 1990s; thus, he had a perch
from which to spread his message. Also, he had relationships with over 12
companies that produce opioids, and justifies it by saying, and I paraphrase,
they benefit his educational and research missions, and partially, his
pocketbook - “without producing in me any tendency to engage in undue influence
or misinformation.”

It’s hard to believe this stuff went on. This story
is a blemish on the history of pain management.

California SB 863 Reforms: UR and the New IMR

So, 2013 is just around the corner and we are gearing up to learn the new law and regulations so that we can apply them in our cases. We have an interim period between now and July 1, 2013 when disputes over medical necessity under utilization review denials, modifications or delays for injuries occurring prior to 1/1/13 are to be determined by an AME, PQME, or a WCJ. Disputes over physical therapy, epidural steroid injections (ESIs), discograms, and spinal surgery are to be resolved under the medical-legal method. Remember, spinal surgery second opinions under Labor Code section 4062(b) have been repealed and are no longer in effect for any date of injury as of 1/1/13, the effective date of SB 863.

For injuries occurring on or after 1/1/13 and for all injuries, regardless of the date of injury beginning on July 1, 2013, SB 863 took away judicial and medical-legal power of determining medical necessity in admitted injury cases, yielding to the utilization review process of Labor Code section 4610 and independent medical review under new Labor Code section 4610.5.

In 30 years of practicing law, there has been a sea change in the way claims examiners adjust workers’ compensation claims. Originally, upon receipt of a claim for industrial injuries, claims examiners would conduct the initial employer level investigation, authorize and schedule the injured employee for treatment, pay appropriate indemnity benefits, adjust the medical billing and hopefully close a file with a C&R. All of this was done with or without the assistance of legal counsel, but the essential adjusting of claims constituted the daily activities of the average claims examiner. What has happened during the last 30 years?

At the 21st National Workers’ Compensation & Disability Conference & Expo in Las Vegas and observed the Exhibit Hall, which looked like it was the size of three football fields. Everything a claims examiner does today seems to be outsourced – from the investigation company that performs the employer level investigation, the nurse case managers who manage the injured worker’s care while emphasizing cost containment measures, the bill reviewers, medical reviewers, UR companies, disability management companies (whatever function they perform is unknown), private disability evaluators, a “one-call” service that makes more than one call to schedule people for diagnostic studies, and a myriad of other services that adjusters no longer perform in a claim. Adjusters no longer adjust claims – they just assign these functions to outside vendors, supervise the results, react to them, and complete tons of paperwork.

Introduction of Independent Medical Review into California’s workers’ compensation system is a new element brought forth for several reasons. The official word is that IMR will better serve the workers’ compensation community by having medical necessity issues decided quickly by medical experts and not by judges or through the litigation process by medical-legal reporting from AMEs or PQMEs.

The proponents of IMR claim that the IMR process itself will promote more common sense approaches to medical treatment of injured workers. Expert physician review using California’s Medical Treatment Utilization Schedule (See Labor Code section 5307.27 and set forth in California Code of Regulations, title 8, sections 9792.20 et seq.), peer reviewed national treatment protocols, and expert opinion based on evidence based medicine will reduce medical treatment costs and eliminate unnecessary and ineffective treatment. IMR will quickly and efficiently resolve disputes over medical necessity.

Post surgery physical therapy that is routine in knee and shoulder surgery cases, medications for chronic pain, including the use of anti-depressants, diagnostic studies such as MRI and CT scans once a year (which is standard of care outside the workers’ compensation system in confirmed cases of progressive degenerative changes) to determine further deterioration or effect of treatment, ESIs instead of surgery, and repeat EMG/NCV studies that are routine in general medicine all are routinely denied under our UR process pursuant to Labor Code section 4610.

Section 4610 simply mandates that all claims administrators have a utilization review process in place – there is no statutory mandate to use it. As pointed out by the Supreme Court in SCIF vs. WCAB (Sandhagen) (2008) 44 Cal. 4th 230, 186 P.3d 535, 79 Cal. Rptr. 3d 171, 73 Cal. Comp. Cases 981, which was a fight over the need for an MRI scan, utilization review of anything is voluntary. Even the physical medicine limitations for 24 visits of physical therapy, occupational therapy and chiropractic can be overruled by a claims examiner under Labor Code section 4604.5(d)(2).

Now we introduce IMR and place the burden of appealing a UR denial, modification, or delay on the injured worker. Pursuant to Labor Code section 4610.5, the injured worker has 30 days from service of a UR denial, modification, or delay letter to sign and mail the Request For IMR to the Administrative Director to determine whether the dispute is really over medical necessity and then send it off to IMR through Maximus Federal Services in Reston, Virginia. Whereupon, the unknown IMR reviewer has 30 days to decide if the injured worker gets what medical treatment the employer’s own MPN physician is requesting, which was denied under the employer’s own UR process.

Regardless of how you feel about this and the comparison to how treatment is rendered for the same illnesses or injuries outside the workers’ compensation system, it remains to be seen if injured workers will get better, more efficient and effective medical treatment under the IMR process. The proponents tell us, even though IMR is a new concept for work related injuries, the IMR process will cause a blow-back where claims examiners can see where IMR routinely overrules UR denials, modifications and delays that we currently see in our cases. The thought is that claims examiners will see a pattern where IMR reverses UR denials, modifications or delays giving claims examiners the power to overrule UR denials in the first place, or to not even use UR at all for certain requested medical treatment requests.

In fact, some claims administrators have mandated their claims examiners to “bundle” pre-authorization for treatment and not even use UR. For example, for specific back injuries, one claims administrator pre-authorizes its own MPN physicians to provide up to 18 physical therapy visits, x-rays, an MRI scan and up to three epidural injections without any prior referral of a request for authorization to utilization review. The claims examiner simply authorizes the request for treatment from the physician. No middleman, no outside vendors, just common sense applying in these cases.

Utilization review costs about $125.00 for each referral. The cost of independent medical review has been set by regulation. Title 8 CCR section 9792.10.8 establishes a sliding scale for payment by claims administrators for the IMR process. For IMR by a medical doctor when the request is in 2013, the IMR will cost $560.00, or $495.00 if the reviewer is not a medical doctor, such as a psychologist. Expedited reviews cost $685.00 for an MD or $595.00 for a non-MD reviewer. If the IMR organization withdraws the IMR before receipt of the documentation from the parties, a withdrawal fee is $215.00. For IMR requests in 2014, these costs increase.

So for every single UR process, claims administrators are paying outside vendors about $125.00; for a typical IMR for a medical doctor review, the claims examiner will be paying $560.00. So that is $685.00 for the combined costs of UR and IMR for each request for authorization for treatment.

Look at the economics of this! Any attorney who represents injured workers should advise his or her clients – new ones and old ones – to sign the Request for Independent Medical Review on every single UR denial, modification or delay letter he or she receives from a claims administrator or its UR vendor. If an employer’s MPN physician prescribes treatment that is subject to UR and a denial, modification, or delay letter is sent to the injured worker, and if represented his or her attorney as required by the regulations (see tit. 8 Cal. Code Regulations section 9792.9(c)(4)), the injured worker should be advised by his or her counsel to sign and mail the Request for IMR to the DWC Administrative Director’s Medical Unit every single time a UR denial, modification or delay letter is received.

This will force the claims examiner to take a very close look at what is being denied, modified, or delayed and why. At any time, a claims examiner can overrule UR before the injured employee signs and mails a Request for IMR. The adjuster should adjust – beginning with when the treating MPN physician sends in the now required Request for Authorization for treatment form (See DWC Form RFA). Adjusters should not require their own MPN physicians to send requests for authorization to UR companies in the first place. Claims examiners should have the authority to adjust claims – pre-authorize treatment and stay out of the UR/IMR process, or if required to send everything through UR, to have the power from the claims administrator to overrule adverse UR determinations and allow the requested treatment. Let the adjuster adjust the claim!

In other words, good claims adjusting would leave out the UR and IMR process in the first place and be substituted by common sense or at least by some internal guidance from a medical director through the claims administrator organization. Claims examiners should be empowered to pick the battles over authorizing or not authorizing treatment – they should not be required to blindly require every RFA to go through UR.

In many defense attorney offices, every single UR denial, modification, or delay after 1/1/13 and after 7/1/13 will cost the claims examiner at least $685.00 for the UR and IMR process. Every attorney who represents injured workers has a duty to advise his or her client to appeal all adverse UR determinations. Perhaps this process will force adjusters to adjust medical treatment issues without creating the friction that is caused by the UR process in the first place.

Defense attorneys should always recommend that claims examiners include them in the UR/IMR loop, even though the regulations do not require service of UR or IMR notices on defense attorneys. This is because experience has shown that if a defense attorney is included for service of notices of UR denial, modification or delay, then sometimes a meaningful discussion between the defense attorney and the claims examiner will result in the requested treatment being authorized. This saves money in the long run and should be standard practice by claims examiners who have retained legal counsel.

Let the adjusters adjust these claims and stop relying on outside vendors to do their jobs for them!

DWC Posts Reform Bill FAQ

The California Division of Workers’ Compensation added a new page to the Senate Bill 863 page of its website that answers frequently asked questions about the reform bill that takes effect Jan. 1, 2013.

The FAQ page provides basic information including a brief description saying the measure was developed through months of negotiations between labor unions and employers with the two goals of increasing permanent disability benefits and reducing the costs and time it takes to deliver benefits to injured workers and resolve disputes. The page also has a timeline for when various provisions in the bill take effect.

The division is providing information about specific provisions in the bill, such as independent medical review and independent bill review, new administrative processes to resolve treatment and payment disputes. Other sections provide an explanation of provisions in the bill that implement a $150 lien filing fee and a $100 lien activation fee, a new process for delivering the supplemental job displacement benefit voucher before an injured worker has an impairment rating.

Other topics covered on the webpage include:

The prohibition on chiropractors serving as the primary treating physician after 24 visits.

The 10 office location limit for qualified medical examiners.

Allowing workers to predesignate a treating physician if they have health insurance.

New minimum and maximum permanent disability benefits and the effect of eliminating sleep, sexual and psychological conditions from being used to calculate permanent disability awards.

The FAQ page is intended to help system users better understand the changes that will be coming to California’s workers’ compensation system, according to Destie Overpeck, acting administrative director of the DWC.

“Our goal is to help everyone understand SB 863 so they can be prepared,” Overpeck said in a statement. “We intend to update the page as new questions come in and each set of regulations is implemented.”

Gov. Jerry Brown has signed SB 863, the comprehensive workers’ comp reform bill that Sen. Kevin DeLeon (D-Los Angeles) sponsored. Brown’s administration worked behind the scenes to assure its passage. The negotiated deal between big labor and big business sets into motion a process designed to lower costs for employers and raise benefits for injured workers and their attorneys.

The benefits to injured workers will ultimately increase by more than $700 million beginning January 1, 2013 and continuing the following year.

The projected savings to the employers, which fund the workers’ comp system, are said to come from reducing frictional costs, delays in care, and the addition of some new price controls on services.

Supporters maintain that these changes will not only offset the mandated increase in permanent disability benefits, but will produce actual system-wide savings. Estimates, however, vary widely and will depend on the effective implementation of the bill’s provisions and the ability to withstand the inevitable challenges in court.

A 12.6 % pure premium price increase has been requested by insurance carriers to be effective January 1st, 2013 contemporaneously with the legislation. It is pending likely approval by Insurance Commissioner Dave Jones.

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About Northern California Injured Worker Blog

This blog is published by Sacramento Workers' Compensation Attorney Bart L. Mehlhop. Bart L. Mehlhop is a certified specialist in workers' compensation law. He has been practicing workers' compensation law in the Sacramento area since 1987.

If you were injured at work and you need the assistance of a certified workers' compensation attorney, call Bart L. Mehlhop at (916) 930-9675 for a free California worker compensation case evaluation. Or you may visit the firms website (click here).